GAAR advisory panel to be independent

by Calum Fuller

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08 Nov 2012

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THE ADVISORY PANEL adjudicating on cases brought under the general anti-abuse rule (GAAR) will not include any representatives from HM Revenue & Customs.

The rule, due to be published in draft form on 11 December with a view to coming into force in April 2013, is designed to gauge the 'reasonableness' of tax schemes – and stamp out those deemed as contrived.

It is not yet known how large the panel will be or how it will be composed, but there had been suggestion HMRC would have a place on it.

It is understood, however, that HMRC will soon advertise for and appoint a chair for the panel. That process will not be completed until the new year.

As such, an interim group of panel members led by Graham Aaronson QC – who wrote the original GAAR proposals – will oversee the development of guidance on identifying egregious schemes, after it is published for public consultation in December.

The announcement that the taxman will not have a direct influence on rulings has been met with approval from CIoT president Patrick Stevens, who said the panel should be "wholly independent".

He said: "This is all about making the GAAR work and reducing uncertainty for taxpayers, especially businesses.

"The panel is a key feature of the operation of the GAAR. The government has identified the panel's purpose as being to help taxpayers and HMRC identify the borderline between acceptable planning on the one hand and egregious avoidance, where the GAAR applies, on the other hand."

He added there is a strong case for the panel's decisions to be published, although no decision has been made on that as yet.

"There is a need for confidentiality in relation to individual taxpayers but decisions can be safely anonymised. Given the lack of any clearance system, the publication of advisory panel decisions, including dissenting opinions, is particularly necessary to assist taxpayers and their advisors," he said.

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